What is a Reverse Mortgage
What is a Reverse Mortgage?
It's a financial solution designed for Senior Canadian homeowners
Unlike a traditional mortgage where you make payments to a bank or someone else, a reverse mortgage pays you. You can use the money in anyway you see fit and live your retirement comfortably knowing you don't need to leave your home.
The biggest benefit of the CHIP reverse mortgage is that you are not required to make regular payments for as long as you or your spouse lives in your home.Contact Us Today!
CHIP Reverse Mortgage Quick-Facts and Features
The money you receive does not constitute a part of your taxable income, meaning that your Old Age Security (OAS) and Guaranteed Income Supplement (GIS) is not affected.
Maintain Ownership of Your Home
Contrary to popular belief, you will not lose your home with a Canadian reverse mortgage. You'll never be asked to move or sell to repay your CHIP Reverse Mortgage. The requirement is to maintain your property and stay up-to-date with property taxes, fire insurance, and condominium or maintenance fees while you live there.
Use The Money Any Way You Wish
A reverse mortgage can help you enjoy your retirement or cover unexpected expenses. Pay for medical bills, upgrade your home, help family and loved ones, travel and pay monthly expenses without depleting your current savings. The only condition is that any outstanding loans secured by your home must be paid out with the proceeds from your CHIP Reverse Mortgage.
Keep All Remaining Home Equity
In many years of experience, 99 out of 100 homeowners have money left over when their CHIP Reverse Mortgage is repaid. And on average, the amount left over is 50% of the value of the home when it is sold.
To qualify you must be a Canadian homeowner, 55 years of age or older. The age qualification applies to both you and your spouse. Get up to 55% the value of your home; No credit, no health check, and no income needed. Your home must be your primary residence.
No Repayment While Living In your Home
Regular mortgage payments are not required while you or your spouse are living in the home. The full amount only becomes due when you and your spouse no longer live in the home.
Changing the Financial Equation
If you're like many other 55+ Canadians much of what you own fits into two categories...the equity in your home and the money you've saved. Chances are, the value of your home has grown over the years and makes up a good portion of your net worth. While having a home that has built value is positive, you typically can't spend that value unless you sell it. And that's something many homeowners simply do not want to do.
A Reverse Mortgage lets you change the home equity and savings balance by turning some of your equity into cash. Unlike many mortgage-based financial products, you’re not obligated to make any payments until you choose to move or sell.
What makes this program work is that participants only take up to 55% of the value of their homes, which ensures you have access to the cash you want and also the security you need.
You're In Control with a Reverse Mortgage
You worked hard to become a homeowner, and it's important to us that we keep it that way. With a CHIP Reverse Mortgage, you always maintain control of your home*. In other words, you will never be forced to sell or move as a result of changing home values or earning power (remember, there are no payments). And we guarantee the amount that you or your estate eventually has to repay will never exceed the fair market value of your home at the time it is sold.* There’s no reason your home should ever be a burden to you or your family.
* As long as you keep your property in good maintenance, pay your property taxes and property insurance, and your property is not in default
Access up to 55% of the value of your home
The Reverse Mortgage Process is Easy!
Find out how much money you are eligible to receive with our free estimate.
Our team will contact you to verify your information and answer questions.
You receive the money you need in one lump sum or in multiple installments, the choice is yours.
No monthly payments. The full amount becomes due when you are no longer in the home.
Your Money, Your Way
A Reverse Mortgage is structured to ensure you get the money you need in precisely the way you want it. Whether you wish to receive your money over time or in one lump sum, the choice is yours. Likewise, if at any time you would like to repay the principal and interest in full or switch to paying interest on an annual or monthly basis, you can do that too.
You Have Earned Your Home Equity
We believe you have the right to access the equity in your own home, regardless of your current income or health. To benefit from a Reverse Mortgage, there’s no need to provide information about your income, or medical history.
By Canadians, For Canadians
A Reverse Mortgage is a Canadian financial solution that benefits Canadian homeowners. The Reverse Mortgage has been available to Canadian homeowners since 1986 and is provided by Home Equity Bank, a Schedule 1 Canadian Bank.
What if the homeowner has an existing mortgage?
Many of our clients use a reverse mortgage to pay off their existing mortgage and debts, freeing up cash flow for other things.
What makes a Reverse Mortgage different from HELOC's (Home Equity Lines of Credit)?
HELOCs are a good short-term borrowing option for people who can pay the interest and loan in the near future. However, HELOCs are callable loans and there exists significant risk of non-renewal or cancellation.
Will the homeowner owe more than the house is worth?
The homeowner keeps all the equity remaining in the home. In our many years of experience, over 99% of homeowners have money left over when their loan is repaid. The equity remaining depends on the amount borrowed, the value of the home, and the amount of time that’s passed since the reverse mortgage was taken out.
What fees are associated with a Reverse Mortgage
There are one time fees to arrange a reverse mortgage such as an appraisal fee, fee for independent legal advice as well as our fee for administration, title insurance, and registration – many of these are common with a conventional mortgage. With the exception of the appraisal fee, these fees are paid for with the funding dollars.
Should a Reverse Mortgage be considered as a loan of last resort?
No. Many financial professionals recommend a reverse mortgage to customers who would prefer to age at home, who want to reduce their monthly mortgage servicing costs, and want to supplement their monthly income with tax free funds.
How old do you have to be to qualify for a Reverse Mortgage?
Both you and your spouse need to be 55 years of age or older to qualify
Does the bank own my home if I get a Reverse Mortgage?
No. The title of the property remains in the homeowners’ name the entire time. You don't pay the bank, a reverse mortgage pays you. It’s that simple. You always maintain ownership of your home and you’ll never have to move or sell for as long as you or your spouse lives in the home.